Uttarakhand High Court
Digvijay Singh vs Mahindra And Mahindra Financial on 13 March, 2020
Author: Sharad Kumar Sharma
Bench: Sharad Kumar Sharma
HIGH COURT OF UTTARAKHAND AT NAINITAL
Writ Petition No. (M/S) No. 3153 of 2019
Digvijay Singh ...Petitioner
Vs.
Mahindra and Mahindra Financial
Services Ltd. and Another ...Respondents
With
Writ Petition No. (M/S) No. 3152 of 2019
Digvijay Singh ...Petitioner
Vs.
Mahindra and Mahindra Financial
Services Ltd. and Another ...Respondents
Present: Mr. B.S. Kathayat, Advocate, holding brief of Mr. Ahrar Baig,
Advocate for the petitioner.
Mr. Lalit Sharma, Advocate for the respondent.
Hon'ble Sharad Kumar Sharma, J.
The only difference in the above two writ petitions is that in WPMS No. 3153 of 2019, it is arising out of an arbitration award dated 12.10.2012, whereby, as a consequence thereto, an Arbitration Execution Case No. 64 of 2014, Mahindra and Mahindra Financial Services Ltd. Vs. Digvijay Singh and others, had been instituted by the respondents for executing the aforesaid award. Whereas, in WPMS No. 3152 of 2019, the award which has been put to challenge is dated 26.06.2012, which was arising out of Arbitration Execution Case No. 66 of 2014, Mahindra and Mahindra Financial Services Ltd. Vs. Digvijay Singh and other, its has been filed by the respondents, for executing the award.
2. In both the writ petitions, the challenge which has been given by the petitioners is to the order dated 15.07.2019, as passed by the District and Sessions Judge, Rudrapur, District Udham Singh Nagar in the Arbitration Execution Cases Nos. as referred to above. As a consequence thereto, while enforcing the award in an execution proceedings the amount thus awarded for example that of `35,38,902/- respectively in both the cases is being sought to be 2 recovered by issuance of a recovery citation by invoking the provisions contained under Section 280 to be read with Rule 236 of the UPZA & LR Act.
3. The arbitration proceedings which are governed by the provisions contained under the Arbitration and Conciliation Act of 1996, which happens to be a special statute, but that does not make the provisions of the CPC applicable in its entirety except the exception which has been carved out under Section 36 of the Act, where the provisions of Order 21 has been attracted to be made applicable where an award rendered by the Arbitrator is put to in an execution.
4. It is the case herein that the aforesaid two awards, as referred above, they were sought to be enforced by the respondent by filing the respective execution proceedings as detailed aforesaid for which the impugned order dated 15.07.2019 has been issued.
5. The argument of the learned counsel for the petitioner is that in execution of an award; though it could be made under Section 36 of the Act, by attracting the provisions contained under Order 21; but, in an event if the award is to be enforced, the Executing Court will have to confine its execution in the light of the provisions contained under Order 21 Rule 30 of CPC, which is quoted hereunder i.e. by way of attachment of the property or sending the judgment debtor in a civil prison:-
"30. Decree for payment of money. - Every decree for the payment of money, including a decree for the payment of money as the alternative to some other relief, may be executed by the detention in the civil prison of the judgment-debtor, or by the attachment and sale of his property, or by both.
6. The recourse of executing an arbitral award by issuing recovery warrants by attracting the provisions contained under Section 280 of the UPZA & LR Act, is not contemplated under 3 Order 21 Rule 30 of the CPC. Whereas, on the other hand, the learned counsel for the respondent submits that since the petitioner/judgement debtor of the award has not challenged the award itself, he cannot questioned the impugned order dated 15.07.2019, because he has submitted to it. This argument of the learned counsel for the respondent is not appealable and acceptable to this Court for the reason being that challenge to an award rendered against the petitioner is one aspect of the controversy and the petitioner if so chooses not to challenge the arbitral award, it does not mean that he would be deprived of raising a question even with regards to the propriety of the execution proceedings once it happens to be dehors to the provisions contained under Order 21, which has attracted to be made applicable by Section 36 of the Arbitration and Conciliation Act of 1996. Further, non challenge to an award, will not given free hand to the decree holder of award to get it executed, in what ever manner he chooses, which is unknown to the recognized procedure of law of execution.
7. The learned counsel for the petitioner further submits that the aforesaid issue with regards to the rights of the Civil Court, while executing an award, attracting Order 21 as to whether the decreetal awarded amount it could be recovered as an arrears of land revenue by issuance of recovery warrants was an issue which was dealt with by the Hon'ble Apex Court in a judgement as reported in 2006 (2) SCC 241, Iqbal Naseer Usmani Vs. Central Bank of India and Others, wherein and particularly a reference may be had to paras 6 and 7, which are quoted hereunder:-
"6. There is no doubt that the first respondent is a banking company within the meaning of Section 2(f) of the Act. Section 3(b) of the Act provides that where any person is party "to any agreement relating to a loan, advance or grant given to him or relating to credit in respect of or relating to hire-purchase of goods sold to him, by a banking company or a Government company, as the case may be, under a State-sponsored scheme"4
and such person makes any default in the repayment of the loan or advance or any instalment thereof, on a certificate as to default along with a request from the concerned company to the Collector, the Collector shall proceed to recover the amount stated therein as arrears of land revenue. While there is no doubt that the appellant had obtained a loan from the first respondent-banking company and defaulted in repayment thereof there is no evidence to suggest that the loan was relating to hire-purchase of goods sold to him under a "State- Sponsored scheme." The learned Counsel for the respondent frankly conceded that the loan was not under any such "State- sponsored scheme." In our view, the provisions of the Act are not intended to supplant the machinery for execution of all decrees under the provisions of the Code of Civil Procedure. They can only be utilised for recovery of sums due in the special cases enumerated in Section 3(1) of the Act.
7. Upon a perusal of the record, and after hearing learned Counsel, we are not satisfied that the case of the appellant falls within the parameters of Section 3 of the Act. Consequently, the revenue officers have neither the authority to issue any certificate for recovery, nor the power to take any steps for recovery of the decretal amount. The High Court seems to have been impressed by the fact that the money was public money, and that in order to encourage development in the country, banks are providing loan facilities to persons who are willing to purchase vehicles and further that if such a loan is treated as a commercial loan, it would be difficult for the Bank to recover the same by filing a civil suit, which takes years and years to decide. According to the High Court "the money of the Bank and financial institutions is public money, which should be in circulation, otherwise the Bank and depositors will suffer." We arc afraid that while this may be very good sentiment, it cannot apply in the face of Section 3 of the Act for the reason that Section 3 does not envisage the provisions of the Act being utilised for recovery of every loan taken. Section 3(1)(b) permits this to be done only in respect of loans taken under a "State-sponsored scheme", which expression has been defined in Section 2(g) of the Act. Since it is admitted that the loan taken by the appellant was not under or in relation to a "State-sponsored Scheme" within the meaning of Section 2(g), whatever else it may be, it would not be recoverable by recourse to the machinery under Section 3 of the Act.
8. The legal issue stands squarely covered by the aforesaid judgement of the Hon'ble Apex Court in Iqbal Naseer Usmani's case (supra), is admitted by the respondent.
9. Hence, in view of the aforesaid reasoning, the present recovery proceeding, which has been initiated by the order of 5 District and Sessions Judge, Rudrapur, District Udham Singh Nagar dated 15.07.2019, it runs contrary to the provisions contained under Section 36 to be read with Order 21 of the CPC. Hence, the recovery of the awarded amount through recourse of the provisions contained under the UPZA & LR Act is not sustainable as it could not be recovered as arrears of land revenue by issuing recovery citation dated 27.08.2019. The same is hereby accordingly quashed. The writ petitions stand allowed.
10. However, allowing of the writ petitions and quashing of the recovery proceedings of recovering the awarded amount as arrear of land revenue, would not entail that as if this Court has expressed any opinion or created a bar for the Court below to not to proceed to execute the award strictly in consonance to the provisions contained under Order 21 of the CPC attracted by Section 36 of the Arbitration and Conciliation Act, 1996.
11. Subject to the above observations, the writ petitions stand allowed.
(Sharad Kumar Sharma, J.) 13.03.2020 Mahinder/